Further food price cuts to ease cost of living concerns

Snacks are displayed in a supermarket in Seoul on Wednesday. Lotte Wellfood and Haitai Confectionery and Foods have announced price reductions for their snacks. [YONHAP]

Korean confectionery and bakery companies are lowering the prices of their products following ramyeon cost drops, as the government tries to contain the living costs amid inflation.

Lotte Wellfood on Wednesday announced it will cut the prices of its three popular snacks — Butter Coconut, Lotte Sandwich Cookie, and Zec — by 100 won ($0.08) starting from Saturday.

The three snacks, which now cost 1,700 won, will be sold at 1,600 won, based on convenience store prices.

Haitai Confectionery and Foods also announced their plan to lower the price of their popular Ivy cracker by 10 percent next month.

This will bring the current price of 3,000 won in convenience stores down to 2,700 won.

Despite facing significant cost burdens due to the rising prices of raw materials, Lotte Wellfood and Haitai expressed the necessity of reducing product prices to alleviate the financial burden on customers.

"It is challenging for confectionery brands to reduce prices across all the products as diverse ingredients are used like potatoes and chocolate, in addition to flour," a source from the confectionery industry said. "We are reducing prices concentrating on flagship brands as a means to mitigate the impact on consumers."

The baking sector also joined the recent wave of price cuts.

SPC Group announced Wednesday afternoon that it will lower prices for 30 bakery items, including sliced bread, cream bread, and baguettes, gradually by an average of 5 percent starting in early July.

SPC Group is the operator of Korea's largest bakery chain Paris Baguette as well as SPC Samlip and Paris Croissant.

Paris Baguette will be reducing prices by 100 to 200 won for a total of 10 items, which includes sliced bread and baguettes. SPC Samlip will also be implementing price reductions of 100 to 200 won for a total of 20 items, including sliced bread and cream bread.

The recent trend of price cuts in confectionery and bakery came as ramyeon companies reduced the prices of their major noodle products after government pressure. Finance Minister Choo Kyung-ho addressed the issue of prices for ramyeon — a representative of a daily food item — in a TV program on June 18, expressing that companies would "adjust the ramyeon prices accordingly."

In line with this, the Ministry of Agriculture, Food and Rural Affairs on Monday held a meeting with major domestic milling companies, urging them to lower the price of flour, hoping it could further enable adjustments to the cost of ramyeon products. In response, the companies said they will consider reducing flour shipping prices starting in July.

On Wednesday, Ottogi and Paldo announced their plans for price reductions, following in the footsteps of Nongshim and Samyang Foods the previous day. With these latest developments, all major Korean instant noodle firms took action to decrease their product prices to align with the government's call.

Ottogi announced on Wednesday a 5 percent cut in the prices of 15 ramyeon products, starting in July.

The 5-pack Snack Ramen bundle will see a 5.9 percent reduction, while the 4-pack Sesame Ramen and 4-pack Jin Jjambbong Ramen will have decreases of 4.3 percent and 4.6 percent, respectively.

However, the price of their flagship product, Jin Ramen, will remain unchanged.

"Jin Ramen has maintained its price since 2010, and we intend to continue offering it at a low price compared to our competitors' products, even after the recent price reductions," an Ottogi spokesperson said. "We hope that the decrease in ramyeon prices can stabilize the cost of living for the public."

Paldo has decided to lower the prices of 11 ramyeon products on Wednesday, including Ilpoom Seafood Noodle Soup, Jumbo Pack Noodles, and Namja Ramen, by an average of 5.1 percent. These adjusted prices will be gradually implemented starting on Saturday. For example, customers can expect a price decrease of 60 won for the mentioned products, bringing the price down from 1,000 won to 940 won.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]